IFA Association shoots off letter to AMCs asking their stance on SEBI’s commission disclosure diktat

It's a good step by AIMDA

To, The Finance Minister
Resp.Sir,
Plz..help..kindly cancel....this Kala Kanoon....and save IFA... also..IFA'S family...

To, The Finance Minister
Resp.Sir,
Plz..help..kindly cancel....this Kala Kanoon....and save IFA... also..IFA'S family...

If commissions is disclosed, it may paved a way for passback....which may be bad for Industry developent.....and also it may be a threat for the livelihood of IFAs

I request to the regulator "Please do not take such steps which finish the life of IFAs who have taken advisory as a serious business &spent their cream period to spread this "

SEBI has a larger game plan.SEBI is indirectly trying to ask the investor community to take the direct route.This is I think nothing else but extra territorial & unnecessary activities on the part of the SEBI.

This is a pure example of "making of Black Law' ........worst even then British had made any Law.

Could any one can tell that there is a business which discloses their earnings to there consumers.................there are much larger, much larger pocket in many business but even it is never known to any ..........Then what is logic behind this unethical LAW ?

a very good move by AIMDA. I would like to formally become a member of the association. i request you to advice me the procedure to join by mail.

SEBI should explain the rationale behind this decision. If it is to push Investor for "direct" instead through distributor, is it a wise decision. Can a govt officials decide on behalf of AMC or Investors what should be the marketing and distribution startegy. Let business decision be left to AMCs. I am surprised by the spineless attitude of AMCs. If AMCs are afraid to even stand up to such nonsense from Regulator's diktat, it is clear that we are not a democracy but a banana republic or in authoratitian rule.

SAVE IFA

Instead of imposing & making new rules for IFA every time why SEBI not imposing rule for discloser of commission to Banks & other big institutions who misguide d investors by investing their money to complete their target

This is only murder of IFA communit by govt. Dog Sebi

This is only murder of IFA communit by govt. Dog Sebi

It's called andher nagri chopat raja

Save IFA

SEBI ,in the name of investors protection, is trying to keep investors away from mutual fund..may be to benefit someone unknown to public purposely.
The body has been reprieved by courts on SRO by acting in a hurry even after strong observation against its action on the matter.

With power comes responsibility.
Deplorable action of SEBI indeed.

SEBI directive to disclose commission on statements is unethical,illogical and unwise.SEBI is bent upon destroying MF Distributors and MF Industry.

save IFA

SEBI's directive to disclose commission is illogical.By doing so we the small distibutors would be greatly affected.Please save our family & children.

Dear Sir

It is to bring to your notice about ridiculous, maligned and one sided circular being issued by market regulator SEBI to disclose mutual fund distributor’s commission in client statements going forward.

Currently, mutual fund distributors are already giving an annual disclosure to AMFI which states that we are disclosing commissions to investors. Also, AMCs disclose the commissions paid to the top 400 distributors on their websites. AMFI also publishes the aggregate commissions earned by these distributors across all AMCs.

Despite AMFI’s (industry and AMC body) plea to not go ahead with commission disclosure rule in account statements, SEBI has instructed AMCs to disclose commissions in half-yearly account statements.

The following points have come up for notice and review after this circular being passed:

1) Has SEBI received complaints from customers in regard of non-disclosure of commissions by distributors? If not, why the need for senseless circulars? And if yes, then why not punish the culprits rather than destroy the whole IFA community.

2) Giving too much information to investors will only confuse them and resist them to take up services of MF distributors wherein they are guided and educated by our community to invest in mutual funds, provide consultancy services of picking up right funds depending on clients investment portfolio, past experience, income profile, life stage, risk profile, investment horizon, doing portfolio review and rebalancing, guiding the client in difficult times etc. Does SEBI think that such services are free in nature and IFA as a community should not be there in the first place? Let them reply in plain terms if distributors are required or not in the industry.

3) The move will be inducing pass back culture which only established distributors and big banks can afford. No more new distributors to join the industry. What happened to the idea of Skill India? What happened to idea of self sustainable employment generation for educated youth in India? Are we happy with less than 10000 active distributors in a country of more than 125 crore people? How does SEBI encourage new and professionally educated persons to join the industry?

4) Why doesn’t SEBI make it mandatory to disclose commissions across products like structured products, PMS (upto 4-6%), private equity (up to 4-6%), insurance plans (up to 50%) and NCDs (up to 6%) to disclose their commissions? Only mutual funds have been wealth creators among these ridiculously expensive products. All other products have proven to be wealth destructors. Why the regulators are biased against the Mutual Funds distributors only. Also, all industry depends on commissions to selling agents, even a bottle of shampoo sold in India, commissions are paid to distributors and retailers. Do they disclose their commissions in the bill provided to clients. Then why on mutual fund commissions? Smells of rat.


5) There is already a provision of Direct Mutual Funds Plans in all categories for educated and well heeled investors who have high financial literacy and do not wish to take services of a distributor. Also, distributor’s income and commissions are capped through various provisions including maximum expense ratio of fund, capping on upfront commission etc. Then what is the purpose of such a disclosure to investors who have been educated and served over the years by distributors. Does the regulator considers distributors to be only taking up the service of educating and bringing new clients to the industry only to be grabbed up by direct plans lure in future. How does the regulator ensure continued income to distributors for their efforts to educate and bring the clients to the mutual fund industry?

6) The angle of corruption in SEBI board and officials is to be also checked. Its highly likely that the SEBI board, officials and chairman are bribed by big banks and AMC’s who want to get rid of the distributors which are their direct competition. That way they will start enjoying monopoly in mutual fund distribution. All at the expense of the investors and distributor community. Assets and liabilities of all SEBI officials, board members and chairman should be scrutinized by IB and concerned authorities.

SEBI as an industry regulator is acting with malaise and partiality against the distributor community on the behest of the large corporate distributors and banks.

We request you sir to look into the issue seriously and have all angles of SEBI circular being checked. We demand that this SEBI circular on commission disclosure be rolled back asap and no one should be allowed to destroy a budding industry and take away hard earned income of hard working people of India and also not to create disruptions in the market place in the name of investor protection.



I have written the above letter to the Prime Minister and President of India online grievance mechanism. All IFA can copy / change language as they deem fit and proper and write to the PM and President.
10 mins task. Pls do not hesitate. Let 1000 compliants reach the office of the PM and President and they force SEBI to withdraw this circular.
pgportal.gov.in- PM portal

50% of the market is captured by the 5 large AMC. We all should start focussing on next 15 AMC, from No 6 to No 20. We have made them TOP AMC by giving them business. We all are failing to understand that SEBI on its own will never do such things. All / some large AMC only has only given such ideas to SEBI.

If we all are together, in 3 months they will realize our strength.

I fully agree. Top 5 AMCs give these type of ideas. If we support to small AMC, look the result in only in this year. When person of Mutual fund's person is chief of SEBI and he do not understand effect of this action it is very shame. When grow this industry why people disturb it?
But when we try together , we will success. All The best......

unable to understand why not amc oppose sebi direction discloser of commission in a/c statement

I request all IFA associations to jointly and severally represent to SEBI to withdraw the order to disclose brokerage in account statements. They should formulate a step by step plan of action to fight against the order to be continued till SEBI withdraw the order. Detailed action plan should be arrived at by discussion in a forum of all associations. Strong associations please take the initiative. Few suggestions for the action plan shall be a protest march in front of SEBI office, one day no sale, then discontinuance of sale for a week, indefinite discontinuance of sale etc. etc.